Buy a new home under construction or buy a used home?
Advantages and disadvantages of both options.
This dilemma is often posed to foreigners who wish to acquire a home in Spain. Below, we offer a list of advantages and disadvantages of both options, as well as some practical advice.
Advantages if you buy a new home under construction:
Higher quality of housing
The new technical building code that governs all new constructions in Spain is one of the most demanding in Europe, which is the same as in the world. This code requires developers to build with criteria of quality, materials, energy efficiency and insulation never seen before in Spain. This higher quality is also encouraged by new technologies and healthy competition between developers.
More precise and objective market price references
If you acquire a home in a development under construction, you will have better price references than if you buy a used home, since the prices of all units of the promotion do not only serve you as the best market reference, but also confirm that this reference is correct, since there are other buyers who have reached the same positive conclusion. Likewise, it is always easier to compare the prices of a promotion with respect to the prices of another promotion than to compare prices of used homes.
Greater security in the purchase
If you buy a house under construction, you are buying from a developer, and the law is very strict with the conditions of sale and guarantees that a developer has to offer to the buyers of a new house. One of the usual concerns of a buyer of new construction sites is: What happens to the money I give out if the developer does not finish the house, or is it delayed so much in the delivery that I am no longer interested in acquiring it? Well, very simple, all the promoters are obliged to deliver to the buyers of a home under construction the guarantee of securing amounts delivered, or in other words, a bank guarantee, or an approved insurer, which guarantees the return of all amounts given to the developer plus its corresponding legal interest if there is a circumstance that developer does not deliver the home within the established period. In addition, you have to keep in mind that if you buy from a solvent developer, it will always be there to answer any claim and will be interested in doing so, since the continuity of his business is based on his reputation, while a private seller will surely disappear. lacking any interest in satisfaction with acquired housing.
Perhaps this is one of the best reasons to buy a new home under construction, the guarantees. If you buy a new home, among other guarantees, you will have the following:
- 10 years warranty on any damage to the structure of your home, or the building, through mandatory ten-year insurance.
- 2 years warranty on all appliances delivered by the developer together with the home.
- One year warranty for all hidden defects that may appear.
- Finally, the guarantee that it gives, as we indicated earlier, the need of the promoter to obtain your satisfaction as a guarantee for future promotions.
On the contrary, if you buy a used home from a private person, you will practically not have any of the guarantees indicated above unless the house is of very recent termination.
Greater possibility of revaluation and therefore better investment
Both at the time of reselling and at the time of renting, the newer a house is, the greater its market price. This is an obvious axiom. But you also have to keep in mind that, when you buy a used home, the private seller is most likely impacting on the price, not only the amount he paid to the developer, but also all the taxes he had to pay to acquire the property ( that is to say you buyer will be paying the acquisition taxes twice, those of the first buyer -12% – and your own-again 12% – when acquiring the used house), in addition to the benefit that the seller considers convenient. If you buy from the developer directly you are saving that first tax that the seller has in addition to his profit, so your profit margin when reselling is greater. To this we must add that almost always homes under construction have a lower price that tends to rise significantly once finished, another good news and factor to add to your good investment.
Greater and better financing facilities
Promoters are usually financed by banks in their respective developments. When you, as a buyer, want or need bank or mortgage financing for your home, it will be much easier and cheaper to obtain it if you buy a home under construction that is financed by a bank than if you buy a used home. Easier, because the bank knows the first-hand promotion, its market value, its appraisals and is also predisposed to finance those homes, which is the ultimate reason for deciding to fund the developer. Cheaper, because you will save appraisals, some study fees and some mortgage taxes that have already been paid by the developer.
Modifications and personalization of the house
Finally, another obvious advantage of acquiring a home under construction, and naturally depending on how advanced the work is at the time of acquiring it, is the possibility of introducing changes in it, choice of materials , colors, finishes, personalization of the house, in short. Option that is not taken for granted when buying a used home.
With all the above, it seems that there is no reason to buy a used home, but it is not true. Of course, also, although less, there are reasons to acquire a used house in front of a newly built one. One of those reasons is the immediacy if we need to occupy the house now or do not want to wait. Another reason is certainty, when we see a house used in principle, we know what is there, bad good or regular we have the house ready in front of our eyes and we have no need to imagine how our future home will look. Another powerful reason may be the location of the used home that we want to acquire, and that we like so much that we do not want to attend to better reasons. The important thing is that you meditate well on your options and make the best decision for your interests, needs and preferences.
Good luck in your choice